B-173576, B-173579, OCT 12, 1971, 51 COMP GEN 204

B-173576, B-173579, OCT 12, 1971, 51 COMP GEN 204

CONTRACTS - NEGOTIATION - EVALUATION FACTORS - MANNING REQUIREMENTS WHERE THE MANNING CHARTS SUBMITTED WITH THE LOW OFFER TO FURNISH MESS ATTENDANT SERVICES INDICATE UNDERSTANDING OF, AND ABILITY TO FULFILL CONTRACT REQUIREMENTS, INCLUDING WAGE RATES, NUMBER OF WORKERS, AND TOTAL ESTIMATED LABOR HOURS, THE OFFEROR IS WITHIN THE COMPETITIVE RANGE FOR NEGOTIATION, AND THE FACT THAT THE CONTRACT TO BE AWARDED MAY PROVE UNPROFITABLE, ALTHOUGH THERE IS NO EVIDENCE IT MIGHT, DOES NOT JUSTIFY REJECTION OF THE OTHERWISE ACCEPTABLE OFFER. THE EVALUATION CRITERIA NOW EMPLOYED IN MESS ATTENDANT SOLICITATIONS ARE INTENDED TO ADVISE OFFERORS OF THE EXACT ROLE MANNING CHARTS PLAY IN THE EVALUATION PROCESS, AND TO MINIMIZE OFFERS THAT QUOTE PRICES THAT BEAR NO REASONABLE RELATION TO THE MANNING HOURS OFFERED, AND TO PRECLUDE THE ACCEPTANCE OF THE LOWEST RATE PER MAN-HOUR, RATHER THAN THE LOWEST OVERALL PROPOSAL.

TO SELLERS, CONNER & CUNEO, OCTOBER 12, 1971:

FURTHER REFERENCE IS MADE TO YOUR PROTESTS ON BEHALF OF ABC MANAGEMENT SERVICES, INC. (ABC), UNDER SOLICITATION NOS. N00204-71-R 0037 (0037) AND N00204-71-R-0040 (0040), ISSUED BY THE NAVAL AIR STATION, PENSACOLA, FLORIDA.

THE SOLICITATIONS REQUESTED OFFERS FOR MESS ATTENDANT SERVICES AT NEW ORLEANS, LOUISIANA, AND GULFPORT, MISSISSIPPI, RESPECTIVELY, FOR THE PERIOD JULY 1, 1971, THROUGH JUNE 30, 1972. BOTH PROCUREMENTS RESULTED IN AWARDS BEING MADE TO SPACE SERVICES OF GEORGIA, INC. (SPACE SERVICES) ON JUNE 28, 1971, AS THE FIRM OFFERING THE MOST ADVANTAGEOUS PROPOSAL, UNDER EACH SOLICITATION, PRICE AND OTHER FACTORS CONSIDERED.

ABC CONTENDS THAT THE CONTRACT AWARDS VIOLATED THE TERMS OF THE SOLICITATIONS BECAUSE, IN ITS OFFER UNDER SOLICITATION NO. 0037, SPACE SERVICES DID NOT OFFER THE TOTAL MINIMUM HOURS (IF MANAGEMENT HOURS ARE INCLUDED) ESTIMATED BY THE GOVERNMENT TO ASSURE SATISFACTORY PERFORMANCE, AND IN BOTH PROCUREMENTS SPACE SYSTEMS FAILED TO INCLUDE ENOUGH MONEY IN ITS OFFERED PRICES TO PAY FOR THE MINIMUM LABOR COSTS AND PAYROLL TAXES WHICH IT PROMISED IN ITS MANNING CHARTS.

YOU ALSO CONTEND THAT THE CONTRACT AWARDS VIOLATED THE CLEAR LANGUAGE OF OUR DECISIONS IN 50 COMP. GEN. AND B-170706, BOTH DATED MARCH 29, 1971, WHEREIN, AMONG OTHER THINGS, OUR OFFICE WAS CRITICAL OF TWO SIMILAR PROCUREMENTS ISSUED BY THE SAME PURCHASING ACTIVITY BECAUSE THE OFFERORS WERE NOT INFORMED OF ALL EVALUATION FACTORS, AND THE GOVERNMENT'S ESTIMATE OF THE REQUIRED NUMBER OF MANNING HOURS DID NOT APPEAR TO BE REALISTIC.

ABC MAINTAINS THAT, AS A RESULT OF THE REFERENCED DECISIONS OF OUR OFFICE AND THE CONCOMITANT AMENDED TERMS OF THE SOLICITATIONS, IT WAS REASONABLE FOR ABC AND OTHER OFFERORS TO EXPECT THAT THE HOURS OFFERED IN THE MANNING CHARTS SHOULD BE VERY CLOSE TO THE GOVERNMENT'S ESTIMATE AND THAT THE PRICE OFFERED MUST INCLUDE SUFFICIENT MONIES TO PROVIDE THE SERVICES DESCRIBED IN THE MANNING CHARTS. CONSEQUENTLY, ABC STATES THAT HAD OFFERORS KNOWN THAT DEVIATIONS FROM THESE REQUIREMENTS WOULD BE TOLERATED, THEY COULD HAVE OFFERED LOWER PRICES. YOU THEREFORE SUBMIT THAT THE CURRENT CONTRACTS WERE AWARDED ON BASES NOT KNOWN TO ALL OFFERORS AND EACH CONTRACT SHOULD BE TERMINATED, OR IN THE ALTERNATIVE OUR OFFICE SHOULD INSTRUCT THE DEPARTMENT OF THE NAVY NOT TO EXERCISE THE OPTIONS.

FOLLOWING THE REFERENCED DECISIONS OF OUR OFFICE, THE NAVAL SUPPLY SYSTEMS COMMAND, WHICH IS RESPONSIBLE FOR PROVIDING GUIDANCE TO FIELD PURCHASING ACTIVITIES, ISSUED INSTRUCTIONS THAT MESS ATTENDANT SERVICE SOLICITATIONS SHOULD BE MODIFIED SO AS TO ADVISE OFFERORS MORE DEFINITIVELY OF THE FACTORS TO BE USED IN EVALUATING OFFERORS' MANNING CHARTS FOR THE PURPOSE OF ESTABLISHING A COMPETITIVE RANGE BY INCLUDING:

(A) THE GOVERNMENT'S ESTIMATE THAT TOTAL MANNING HOURS BETWEEN SPECIFIED RANGES ARE NECESSARY TO PERFORM THE SERVICES ON REPRESENTATIVE WEEKDAYS AND REPRESENTATIVE WEEKEND DAYS.

(B) A STATEMENT THAT THE COST OF THE NUMBER OF MANHOURS SHOWN BY THE OFFEROR WILL BE COMPARED WITH THE OFFEROR'S PRICE TO VERIFY THAT MANHOURS AND PRICE ARE CONSISTENT.

(C) A STATEMENT THAT ACCEPTABILITY OF DISTRIBUTION OF MANHOURS IN SPACE JOB CATEGORIES WILL BE EVALUATED TO DETERMINE PROPER STAFFING.

AT THE REQUEST OF THE DEPARTMENT OF THE NAVY, THE ABOVE MODIFICATIONS WERE REVIEWED INFORMALLY BY REPRESENTATIVES OF OUR OFFICE WHO CONCURRED THAT THE REVISIONS WERE RESPONSIVE TO THE RECOMMENDATIONS MADE IN THE CITED CASES.

CONSEQUENTLY, UNDER BOTH CONTESTED PROCUREMENTS SECTION 5.1 OF THE REQUEST FOR PROPOSALS (RFP), INSOFAR AS PERTINENT HERE, PROVIDED:

5.1 - EVALUATION OF OFFERORS' MANNING CHARTS

ALL OFFERORS SHALL SUBMIT MANNING CHARTS WITH THEIR PROPOSALS, IN THE FORMAT OF ATTACHMENT A, SHOWING THE ESTIMATED NUMBER OF PERSONNEL PROPOSED IN EACH SPACE EACH HALF HOUR OF A REPRESENTATIVE WEEKDAY AND OF REPRESENTATIVE WEEKEND DAY. THE GOVERNMENT ESTIMATES THAT UNDER PRESENT CONDITIONS SATISFACTORY PERFORMANCE WILL REQUIRE TOTAL MANNING HOURS OF

MANNING CHARTS WHOSE HOURS DO NOT APPROXIMATE THESE RANGES MAY RESULT IN REJECTION OF THE OFFER WITHOUT DISCUSSION. FOR THE PURPOSE OF ESTABLISHING A COMPETITIVE RANGE, EVALUATION OF THE OFFERORS MANNING CHARTS WILL BE BASED ON THE FOLLOWING FACTORS:

1. THE COST OF THE NUMBER OF MANHOURS PER YEAR SHOWN ON THE MANNING CHART INCLUDING WAGE RATES; IF APPLICABLE, FRINGE BENEFITS (HEALTH AND WELFARE, VACATION, AND HOLIDAYS); AND OTHER EMPLOYEE-RELATED EXPENSES (FOR EXAMPLE, FICA), WILL BE COMPARED WITH THE OFFEROR'S PRICE TO VERIFY THAT OFFEROR'S MANHOURS ARE CONSISTENT WITH OFFERED PRICE. ***

2. ACCEPTABILITY OF DISTRIBUTION OF MANHOURS TO PERFORM THE REQUIRED SERVICES SATISFACTORILY, AND TO ASSURE PROPER STAFFING IN SPACE/JOB CATEGORIES PRIOR TO, DURING, AFTER MEAL HOURS AND AT PEAK PERIODS.

NOTHING IN THIS SECTION, OR ELSEWHERE IN THIS CONTRACT, SHALL BE CONSTRUED AS LIMITING THE CONTRACTOR'S RESPONSIBILITY FOR FULFILLING ALL OF THE REQUIREMENTS SET FORTH IN THIS CONTRACT.

UNDER SOLICITATION 0037 THE NAVY'S ESTIMATED NUMBER OF MANHOURS WERE:

ITEM 0001

BETWEEN 52 AND 55 PLUS 8 MANAGEMENT HOURS ON A REPRESENTATIVE WEEKDAY.

BETWEEN 39 AND 42 PLUS 6 MANAGEMENT HOURS ON A REPRESENTATIVE WEEKEND DAY.

ITEM 0002

BETWEEN 94.5 AND 102.5 PLUS 8 MANAGEMENT HOURS ON A REPRESENTATIVE WEEKDAY/HOLIDAY.

BETWEEN 110 AND 118 PLUS 8 MANAGEMENT HOURS ON A REPRESENTATIVE WEEKEND DAY.

SPACE SERVICES' OFFER FOR THESE ITEMS WAS:

ITEM 0001

56 HOURS FOR A REPRESENTATIVE WEEKDAY.

44 HOURS FOR A REPRESENTATIVE WEEKEND DAY.

ITEM 0002

98.5 HOURS FOR A REPRESENTATIVE WEEKDAY.

114 HOURS FOR A REPRESENTATIVE WEEKEND DAY.

INASMUCH AS SPACE SERVICES' OFFER EXCEEDS THE MAXIMUM NUMBER OF HOURS UNDER ITEM 0001 AND EXCEEDS THE MINIMUM NUMBER OF HOURS UNDER ITEM 0002 (EXCLUDING MANAGEMENT HOURS), WE THINK THAT THE OFFERED HOURS DO APPROXIMATE THE GOVERNMENT'S ESTIMATE AND SPACE SERVICES WAS PROPERLY FOUND TO BE WITHIN THE COMPETITIVE RANGE FOR NEGOTIATION. TO CONCLUDE OTHERWISE WOULD REQUIRE IGNORING OF THE FACT THAT MANNING CHARTS ARE USED AS AN AID TO THE CONTRACTING OFFICER IN DETERMINING RESPONSIBILITY, NOT RESPONSIVENESS, FOR WHICH THE CONTRACTING OFFICER HAS QUITE BROAD DISCRETION.

CONCERNING YOUR CONTENTION THAT SPACE SERVICES' OFFER UNDER EACH PROCUREMENT WAS LESS THAN THAT REQUIRED TO PAY MINIMUM WAGES SPECIFIED BY THE DEPARTMENT OF LABOR, PLUS REQUIRED PAYROLL TAXES AND HEALTH AND WELFARE BENEFITS, THE PROCURING ACTIVITY ESTIMATES THAT AFTER THE PAYMENT OF THE MINIMUM WAGE, PLUS HEALTH AND WELFARE, THERE WILL BE APPROXIMATELY $5,000 TO COVER THE COST OF OTHER FRINGE BENEFITS AND EMPLOYEE-RELATED EXPENSES UNDER EACH PROCUREMENT. WHILE YOU DISAGREE WITH THE DEPARTMENT'S COMPUTATION AND ESTIMATE, AND IT WOULD APPEAR FROM THE RECORD THAT SPACE SERVICES' LOW OFFER UNDER EACH SOLICITATION MAY BE BELOW THAT REQUIRED TO ENABLE SPACE SERVICES TO PAY THE COST OF PERFORMANCE (IF ALL OF THE OFFERED HOURS ARE UTILIZED) AND STILL BE ABLE TO ENJOY A PROFIT, WE ARE UNABLE TO CONCLUDE THAT ITS OFFERED PRICES ARE INSUFFICIENT TO PERMIT IT TO SATISFACTORILY PERFORM THE CONTRACT. IN THIS CONNECTION, WE HAVE HELD THAT THE FACT THAT THE LOW BIDDER OR OFFEROR MIGHT INCUR A LOSS IN PERFORMING THE CONTRACT AT THE PRICE SHOWN IN ITS BID OR OFFER DOES NOT JUSTIFY REJECTING AN OTHERWISE ACCEPTABLE BID. 49 COMP. GEN. 311 (1969); B-173088, JULY 27, 1971. WE THEREFORE AGREE WITH THE RATIONALE OF THE ADMINISTRATIVE REPORT TO OUR OFFICE FROM THE DEPARTMENT OF THE NAVY, WHICH STATED:

THE RFP DID NOT SPECIFICALLY REQUIRE EACH OFFEROR TO QUOTE A CERTAIN MINIMUM PRICE PER MANHOUR, NOR DID IT REQUIRE THAT UNDER ANY RESULTING CONTRACT THE CONTRACTOR FURNISH THE EXACT NUMBER OF MANHOURS SHOWN ON THE MANNING CHART, EXCEPT TO THE EXTENT THAT ALL OF THE CONTRACT REQUIREMENTS WERE FULFILLED. THEREFORE, IT CAN REASONABLY BE CONCLUDED THAT IF A CONTRACTOR MANAGED THE JOB EFFICIENTLY, THE NUMBER OF MANHOURS REQUIRED TO DO THE JOB WOULD DECREASE, REDUCING THE CONTRACTOR'S COSTS PROPORTIONATELY.

WE THINK THAT ONCE IT HAS BEEN DETERMINED THAT AN OFFEROR'S MANNING CHART INDICATES HIS UNDERSTANDING OF, AND HIS ABILITY TO FULFILL, THE CONTRACT REQUIREMENTS, INCLUDING WAGE RATES, NUMBER OF WORKERS AND TOTAL ESTIMATED LABOR HOURS, HE SHOULD BE CONSIDERED TO BE IN THE COMPETITIVE RANGE FOR NEGOTIATION PURPOSES. THE EVALUATION CRITERIA NOW BEING EMPLOYED IN MESS ATTENDANT SOLICITATIONS ARE INTENDED TO MORE FULLY ADVISE OFFERORS OF THE EXACT ROLE THE MANNING CHARTS ARE TO PLAY IN EVALUATING THE OFFERS, TO HELP MINIMIZE THE RECEIPT OF OFFERS WHICH QUOTE PRICES THAT BEAR NO REASONABLE RELATION TO THE NUMBER OF MANNING HOURS OFFERED, AND TO PRECLUDE THE ACCEPTANCE OF THE LOWEST RATE PER MANHOUR, RATHER THAN THE LOWEST OVERALL PROPOSAL.

IN VIEW OF THE FOREGOING, WE ARE UNABLE TO CONCLUDE THAT THE CONTRACTS HERE INVOLVED WERE AWARDED IN A MANNER WHICH WAS CONTRARY TO THE LANGUAGE AND INTENT OF THE SOLICITATION, OR CONTRARY TO THE DECISIONS OF OUR OFFICE. ACCORDINGLY, YOUR PROTESTS ARE DENIED.